A "horrendous and botched" attempt by the Cabinet Office to prevent charities who operate Government contracts from speaking out on issues affecting their beneficiaries must not be revived, according to the PRCA's charity and not-for-profit group.

This is one of eight recommendations made by the group in an evidence submission to a House of Lords enquiry on charities' role in society - which the group's chair hopes could bring about change in the relationship between politicians and the charity sector.

The House of Lords' Select Committee on Charities was set up in May, and made a call for evidence with a deadline of last month, ahead of its final report, which must be published by 31 March next year. The PRCA group's evidence is one of 170 submissions that were last week accepted by the committee.

The PRCA's evidence says: "The Cabinet Office’s horrendous (and botched) attempts to introduce a 'gagging clause' into contracts with charities must continue to be resisted. While the Minister responsible has now been re-shuffled, there is still a feeling in the sector that this may come back onto the agenda."

PRWeek sister title Third Sector reported in April that the Cabinet Office had put on hold implementation of a controversial rule preventing any grants from government being used to lobby or influence politicians.

The PRCA group's evidence said that it would be hard to imagine a similar arrangement being made with private companies. "Can the Committee imagine a situation where G4S, Capita or another private company the government outsources contracts to, being banned from having a public affairs function? We would hope not," it says.

Other recommendations the group makes to the committee include reforming the lobbying act (in line with the Hodgson Review), resisting any attempts to clamp down on campaigners' freedom of speech, and to give "support for charities to innovate more in the digital arena – even if this means some projects will 'fail'," the document says.

Simon Francis, co-chair of the PRCA charity group, and founder of agency Campaign Collective, said: "There needs to be fundamental changes in the way charities are perceived by politicians and the public... accepting these recommendations would help charities build a more constructive relationship with government and the public in order to achieve their charitable objects. The benefits to society from doing so, particularly in a time of economic uncertainty, could be immense."

A total of 170 written evidence submissions were accepted by the committee, with most coming from charities but others submitted by regulators, unions, private companies and individuals.